If Obama Wants to Create More Jobs, He Should Get Rid of Regulatory Bureaucrats

But that number is so large that it’s hard to understand what it actually means, so let’s look at some new research to better understand the impact of red tape.

You may remember the “Surf City” song from Jan and Dean that kept repeating “two girls for every boy.”

Well, if that was heaven (at least for guys), we’ve now discovered hell.

Here’s part of the executive summary of a paper by the Phoenix Center, which estimates that every regulator means 100 fewer jobs in the productive sector of the economy.

…we use fifty years of data and modern econometric methods to provide an estimate of the relationship between government spending on regulatory activity and economic growth and job recovery. We estimate that reducing the size of the regulatory bureaucracy may grow the economy and invigorate the labor market. Even a small 5% reduction in the regulatory budget (about $2.8 billion) is estimated to result in about $75 billion in expanded private-sector GDP each year, with an increase in employment by 1.2 million jobs annually. On average, eliminating the job of a single regulator grows the American economy by $6.2 million and nearly 100 private sector jobs annually. Conversely, each million dollar increase in the regulatory budget costs the economy 420 private sector jobs.

These findings are remarkable. Heck, even if the authors are wildly inaccurate and the regulatory burden only leads to 10 jobs lost per bureaucrat, this is still a very damning indictment.

Hmm, each bureaucrat costs the economy $6.2 million. So we don’t even need to make all the bureaucrats find productive jobs to save the economy. We could give each of them a $1 million per year pension and send them home. Then they’d all have $1 million per year, and the rest of us would have $5.2 million per year. Win-win.